Understanding the potential of Poland’s luxury market

Emporio Armani, Warsaw (Poland)

A recent study of the Warsaw School of Economics has revealed the confusing perception and therefore positioning of luxury brands in the minds of Polish consumers. Suprisingly, Polish regard brands such as Adidas or Nivea as luxury and only when it comes to perfumery they make they difference by highlighting major brands such as Chanel or Dior. Mention should be made that the study was conducted on 800 entrants of various age levels.

I believe the reason behind these surprising findings is the fact that Polish consumers, unlike most of their counterparts in the rest of Eastern Europe, have a more conservative nature, with a lesser need to show off their wealth. It is a sort humbleness and respect towards the others, which derives from the days of hardships in their history, the war and communism. The young generation of Poles (aged 15 to 25) is very much driven by the sentiment of anti-luxury and therefore a strong preference for mass market products (apparel and accessories) with a design that avoids any brand recognition. Even if coming from very wealthy families, these youngsters prefer to ride a fancy motorcycle rather than a luxury car or to display the latest gadget such as mobile phone or tablet rather than an luxury branded accessory (bags, jewellery, watches).

The more mature segment of Polish consumers are very much driven by the investment and quality features of a luxury product. They would choose to buy a luxury apparel or accesory product primarily for the quality if its fabric and finishes as well as durability. Thefore the notoriety of the brand comes second. Preference is also given for items which are not easily recognizable as belonging to a certain luxury brand. Believe it or not, the ”bling factor” which is so important in the majority of emerging markets, is hardly to be found in Poland among rich consumers. That is why, choosing the right luxury brand is extremely important when considering the Polish luxury market.

The mentality of saving for the ”gloomy days” is also very present in the minds of wealthy Polish consumers. Although they might afford a Bentley or Rolls Royce, they would buy a BMW. Many wealthy Polish consumers prefer to invest in art and antiques, real estate, watches, furniture.

Already present for years in most Eastern European countries, Ferrari only entered Poland last year and Louis Vuitton has been prospecting the market for many years. With the exception of Burberry, Emporio Armani, Hugo Boss, Escada, Ermenegildo Zegna which have mono brand stores in Poland (each brand with just one store) most of the international luxury fashion brands are present in a handful of multibrand stores. Mention should be made that Poland is the largest economy in Eastern Europe and it is the European market which has been least affected by the international financial crisis.

The sluggish development of the luxury market in Poland is not only due to the Polish consumer profile but also to another important factor which is demographical. Unlike most countries where the capital cities are home to the wealthiest people, in the case of Poland, they are not living in the capital city of Warsaw but in the most important industrial cities of the country (Wroklaw, Gdansk, Krakow, Lodz). As most of these cities have international airports with good connection to major capital cities in Europe, the wealthy Polish can easily travel directly, without even passing through the capital cities. This makes luxury retail development even more challenging as one brand should have more than one point of sale in order to target the majority of the wealthy clientele.

Oliver Petcu, CPP